Q: Do I have to pay tax either in India or the US on the amount gifted to me by my father? What is the documentation required so that I do not have to pay gift tax?
As per the provisions of Sec. 56 of the Indian Income Tax Act (ITA), gifts given by a close relative do not attract any tax in India. Your father would qualify as a ‘close relative’ of yours as per the ITA. Hence any gift given by him to you would be tax-free for both parties so far as India tax incidence is concerned. As far as the paperwork is concerned, all that is required is an offer by the donor and acceptance thereof by the donee in black and white. The donee should request the donor for a gift and then the donor should remit the amount to the donee. Alternatively, the donor can offer the gift. In either case, it is necessary for the donee to accept the gift in writing (maybe through a thank you note). Only then it would be considered as a gift in India. It is preferable to mention the relationship between the donor and the done.